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Wednesday, September 24, 2008

Let free market forces resolve market problems

The question of the day from members of Congress for federal financial bigwigs pushing a bailout of Wall Street fatcats was simple:

"If Warren Buffett can investment $10 billion in a struggling financial institution, why not wait on other big money individuals to buy other bad assets at a bargain?"

Buffett -- with his Berkshire Hathaway stock fund -- made the purchase yesterday. At this moment, his stock is up by almost $139 per share. A share of his stock trades at more than $4,000.

There certainly are plenty of other billionaires out there in this nation and around the world who are waiting for all the bad debt on Wall Street to get cheap enough to purchase a big share of these financial institutions. What happened to letting free market forces take care of free markets?

Merryll Lynch was bailed out by another financial institution, and 10,000 ML jobs were saved. The Fed warns that there will be 100 bank failures if Congress does not act soon. When I was an economics reporter in Oklahoma during the energy industry boom and bust times of the 1980s, the state suffered 100 bank failures from oil and gas assets that went bad. I learned how to read bank financial statements like a board of director.

Guess what? Oklahoma's economy survived. Now it is doing well as the price of gas continues to be high. And Oklahoma City just attracted an NBA team, putting the city on the major league map.

The federal hard heads don't have a good answer to the question at the beginning of this post. That makes me think that allowing people like Buffet buy up all these bad assets and shares of these companies is the best route to go for the nation.

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About Me

I was a political columnist for 10 years for The Tennessean -- although I never saw Al Gore.
I have been diagnosed with leukemia. By the grace of God, I am alive to write this blog. My job was eliminated by The Tennessean when I tried to return from my cancer. But I now write political columns for the Williamson Herald in Franklin, TN. Williamson is the 11th most affluent county in the nation.
I claim no ideology or party. Both betray. I believe in creating change for Americans without health care insurance, for wounded veterans needing more help and for Hispanic immigrants denied human dignity for the contributions they bring. I count Gold Star mothers among my close friends.
I've won three national reporting awards for commentary from the Education Writers Association in Washington, D.C.
I have received the Will Rogers Humanitarian Award from the National Society of Newspaper Columnists. I continue my philantrophy today.
I am not a Bush-hater, nor an Obama lover.
I received two awards for commentary on immigrant children left behind in Nashville classrooms from the Casey Journalism Center at the University of Maryland.
E-mail me at timchavez787@yahoo.com